Yesterday the New York Times reported that Christine Varney, the new antitrust chief at Justice, was running into resistance as she attempted to do her job (frowned upon in the halls of power).

The most significant dispute appears to have occurred between her and the Transportation Department, which approved an “antitrust immunity request” against Varney’s recommendations. The article noted that Transportation “endorsed a policy popular during the Bush administration that favored such industry agreements out of a desire for efficiency.”

How did they attempt to resolve this dispute? Naturally, they called in a mediator with a record of aggressively steamrolling opposition and blundering his way through all matters interpersonal:

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The privatization of transportation infrastructure was supposed to be a Bush administration goal, but based on my (LittleSis-powered) review of Obama’s transition team, it is a major priority of the new administration, as well.

All three of the Obama transition team leads charged with reviewing the Department of Transportation are privatization advocates. Not only that, but their private sector activities suggest that they stand to profit substantially from further privatization of the nation’s transportation infrastructure (highways, bridges, tunnels, and so on).

On Thursday I profiled Mort Downey, a well-regarded transportation expert, as a “quiet name” – an influential decisionmaker who operates behind the scenes, out of the public spotlight. Downey’s work in the for-profit world – as president and now chairman of PB Consult, a division of engineering giant Parsons Brinckerhoff – has established him as a cheerleader for infrastructure privatization. His decades of work in the public sector give him that much more cred as an industry spokesperson.

The two other leads on the DoT review team were Jane Garvey, former FAA chief, and Michael Huerta, a former DoT official.

As of last May, Garvey is head of public-private partnerships (aphorism for infrastructure privatization) at JP Morgan. The hire garnered quite a bit of press attention, including a writeup in DealBook, the New York Times’ Wall Street blog, which observed: “it marks only the latest high-profile hire amid sharply climbing interest in infrastructure investing, which involves toll roads, airports and the like.”

From the internal memo announcing Garvey’s arrival, published on DealBook:

Today is an exciting day for JPMorgan’s Infrastructure Advisory Group. In addition to our advisory and financing role on the $12.8 billion Pennsylvania Turnpike concession, I’m pleased to announce that Jane Garvey has joined JPMorgan’s as head of U.S. Public Private Partnerships in Transportation, reporting to me. In this role, Jane will advise clients in the transportation sector on how traditional infrastructure financing methods can be improved to facilitate much needed project delivery for governments. As federal funding disappears and state and local fiscal positions weaken, public private partnerships are increasingly used as a tool for delivering much needed projects.

Nowadays, many economists believe that the government needs to make significant investments in infrastructure in order to get the economy back on track. Wall Street, on the other hand, clearly has a lot riding on the continued erosion of federal funding for infrastructure.

So it would be no suprise if people like Garvey, who has been purchased captured hired by a Wall Street bank, opposed funding increases for infrastructure, whether it be part of the stimulus package or the upcoming transportation bill. She stands to gain lots of money, probably millions, as infrastructure privatization continues. Why should we believe that she’s working for the public interest, and not Wall Street interests/gross self-interest?

Michael Huerta, the third and final team lead on Obama’s DoT review, is another very well-respected transportation expert with loads of public sector experience. But like Downey and Garvey, his most recent work has been in the private sector, for ACS, a Fortune 500 company that specializes in business process outsourcing.

The division Huerta heads up, ACS Transportation Solutions, is a member of the National Council for Public-Private Partnerships, like Downey’s PB Consult. When a state or local government outsources the management of a toll road, Huerta’s ACS often steps in. It’s not hard to imagine that Huerta stands to gain substantially from privatization. But we don’t have to imagine it. He says so right here, in this ACS investor call from May 15, 2008 (not available online, published on the Voxant FD Wire):

So what is driving our past growth in the future? Well, you are seeing a lot more privatization here in the U.S. and abroad as public authorities, governments look to get more efficiency out of the transportation system, that trend is very good for us.

So privatization is very good for Michael Huerta. And Jane Garvey. And Mort Downey. Every single Obama DoT review member is a privatization advocate, despite the fact that the American public overwhelmingly supports *public* investment in transportation infrastructure (regardless of political affiliation), despite the fact that this is an extremely controversial issue, despite the fact that this was supposed to be Bush’s agenda, not Obama’s.

The transition selections matter because Obama transition review teams were charged with significant personnel and policy decisions at their respective agencies. The DoT review team’s leadership suggests that the Obama DoT will be chock full of privatization advocates and pushovers, and will embrace policies that favor Wall Street interests. The LaHood pick is a good example of how this will play out, but I suspect there are and will be others.

The fact that this hasn’t gotten much attention demonstrates the dangers of the revolving door: Huerta, Downey, and Garvey have leveraged years of public sector experience for private interests and (exorbitant) personal gain, but because of their public service and their status as experts, no one questions their motivations.

And quietly, through the classic process of regulatory capture, Wall Street has positioned itself to shape and control the future of American transportation infrastructure. Who knows if they will be successful, but if highways are anything like houses, it certainly is a scary prospect.

LittleSis brings transparency to the quiet names: people who are not necessarily officeholders, who may not be very well-known, but who exert significant influence over the policymaking process. They make decisions and advocate for policies that affect our lives in profound ways, but we are not well-equipped to hold them accountable or understand their sphere of influence. From time to time, we’ll use this space to give special attention to one of these individuals.

Today’s “quiet name” is Mort Downey. I picked Downey, a former Deputy Secretary of Transportation and recently a member of the Obama Transition, because I believe his career trajectory, influence, and policy outlook shed light on the rationale behind the low levels of public transit funding in the stimulus.

Some background on the stimulus: House Transportation Committee Chair James Oberstar wanted $17 billion in public transit funding in the stimulus package, but by the time the House bill was presented, it had been slashed to $9 billion. The White House was behind the cuts, and Oberstar and Larry Summers reportedly engaged in a shouting match. Congressman Peter DeFazio later called out Summers for being anti-infrastructure. $3 billion of the cuts were eventually restored.

Supposedly, the Obama team’s single most important calculus when determining what made it into the stimulus package was whether projects were “shovel-ready” – projects that can get underway quickly and provide a short-term boost to the economy. But according to many respected economists, including Dean Baker and James K Galbraith, the stimulus package doesn’t do near what it could in terms of funding shovel-ready mass transit projects. In other words, shovel-readiness is not an adequate explanation for the low levels of funding.

The name Mortimer Downey caught my eye because he offered up this bogus explanation to defend the Obama team’s cuts in an interview with ShovelWatch, a stimulus tracking project spearheaded by The Takeaway, WNYC, and ProPublica:

“You have to be realistic about how fast and where money can be spent,” said Downey, who no longer has a formal role in the Obama team. “Some of the things in the transportation and infrastructure proposal are great long-term proposals,” but, Downey said, they can’t get started quickly enough. He noted the Obama administration will release a budget this year, and there will be a new transportation appropriations bill. “I don’t think you can reach an overall conclusion about how well transit is faring until we see all those things. Otherwise it would be a rush to judgment.”

Downey is a well-respected transportation expert. He has impressive credentials: Assistant Secretary of Transportation under Carter, CFO and Executive Director of the MTA in the 1980s, Deputy Secretary of Transportation under Clinton. He was an Obama Transition team lead for the review of the Department of Transportation. You can see it all on his LittleSis profile. Recently, the Washington Post mentioned him as a candidate for Transportation Secretary, calling him the potential “wise man” pick.

But there’s plenty of evidence to suggest that the wise man doesn’t wield his substantial influence on behalf of the public interest.

Who does he speak for? Since leaving the Clinton administration, Downey has worked as a self-employed transportation consultant at Mort Downey Consulting, and as President and then chairman of PB Consult, a transportation consulting subsidiary of the engineering giant Parsons Brinckerhoff. PB Consult advises clients in various transportation markets on a whole range of strategic issues: project planning, finance, public-private partnerships, regulatory issues, and so on.

PB Consult’s core business appears to be infrastructure privatization. Two of the three deals featured on the front page of the company’s website involve the privatization of transportation infrastructure – two toll roads, in fact: the A25 Québec and the Northwest Parkway Toll Road in Colorado. The third deal appears to be another Wall Street boondoggle, involving the purchase of port container terminals by the Ontario Teachers’ Pension Plan.

This is what the sage’s firm is proud of?

PB Consult is also a member of the National Council for Public-Private Partnerships. “Public-private partnership” is apparently the accepted industry term for infrastructure privatization (I’m guessing it plays better with the public).

Downey has established himself as a cheerleader for infrastructure privatization in recent years. In 2007 he penned an opinion piece for Traffic World, an industry magazine, titled A Role for Public-Private Partnerships. Downey argued that private collaboration was the best way forward for the nation’s transportation infrastructure, given the funding crisis:

Facing this staggering shortfall in funding, traditional approaches have been increasingly augmented by partnerships of private groups with public agencies, which during the last five years have begun pumping larger amounts of money into the system.

There are many forms of PPPs and ways for the public and private sectors to collaborate as partners to leverage scarce public resources and expedite needed transportation projects, while protecting and promoting public interests.

The argument is smooth and innocuous-sounding, and it’s easy to see why he is a high-paid spokesperson and lobbyist for Wall Street’s infrastructure privatization effort.

He also appears to be something of a spokesperson for the Obama administration, and his transition role indicates that he is well-regarded by the Obama team, even if he did not get the Transportation post.

Anyway, his argument in Traffic World begs the question: if funding shortfalls are “staggering,” why wouldn’t Downey see the need for more transit funding in the stimulus bill?

More on the way, but if you’re interested in the pitfalls surrounding privatization, particularly with respect to transparency, check out this Progressive States Network report.